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ESCI-375
Belize and its Economy—a Brief Overview from A Sustainability Standpoint
What do we produce in Belize?
 Bananas
 Textiles
 Citrus
 Sugar
 Papayas
 TOURISM
GDP: define: Gross domestic product—market value of all goods and services produced
in a country
Commonly used as a measure of economic development—why? Easily measured, easy to
compare across countries.
What does GDP fail to account for?
 Informal economic activity—drugs! Hand-me downs, etc.
 Distribution of income
 Quality of life—social benefits, employment, etc
 Environmental damage and SUSTAINABILITY!
 For example, GDP does not include the value of non-market resources and
benefits of preservation
GDP per capita: GDP/# of people
GDP per capita Belize in 2003 is 6,950
Why is GDP per capita not a good measure of economic well being?
It doesn’t account for income distribution—Gini index works on this
Social Measure: Human Development Index: combines
 Life expectancy
 Literacy rate
 School enrollment ratio
 GDP per capita
Belize is 91 out of 177 countries in 2003 for the HDI ranking
Opportunities and Threats
1. Access to capital
What do economists mean by access to capital?
What is financial capital?
Why is debt such a huge problem in Belize?
Lecture Notes
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2003: Total debt service is 13.6% of GDP.
This means that 13.6% of GDP is going to pay interest on debt!
If GDP is 1 Billion, this means that 136 Million dollars are just being spent on interest
payments.
This leaves less money for things such as
 Social services
 Schools
 Infrastructure
2. Global environmental change
Belize is considered a Small Island Developing State because of its low-lying coast,
coastal communities, and open economy
SIDS are considered extremely vulnerable to climate change!
Coral reefs are extremely vulnerable to climate change
Most of the tourists in Belize come visit to see the coral reefs, as they get damaged from
climate change, so will the tourism economy
3. Trade liberalization
Comparative advantage: specialization in the production of goods in which a nation is
most efficient
Theoretically, if there are 2 countries producing the same 2 goods, and one is more
efficient than the other, they can produce the thing they are best at producing, and swap
Talk about a simplifying example, such as cars and bananas and the US and Belize!
Friedman’s 2 Stages to increase standard of living:
1. Open the economy to free market, export-led growth, privatization, and
labor reforms
2. Deepen process to improve infrastructure, education, services, institutions,
and culture
What are some ways you think that Belize can keep working toward stage 1, so that they
can get to stage 2 in a sustainable way?


Niche in sustainable agriculture
Niche in eco-tourism…
What else?
Lecture Notes
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Belize has a tremendous amount of natural resources.
One way to measure the value of these resources is through non-market valuation:
An economic method for valuing goods and services not commonly bought and sold in a
market
Revealed Preference
Stated Preference
These non-market benefits are NOT included in GDP
Neither are the non-market costs of extraction and the pollution that can be caused by oil
extraction
One final way is with creative environmental policies that address the resources that
Belize has, while recognizing the economic constraints that it faces:
Taxes on pollution
Subsidies for environmentally friendly operations
Environmental education
Sustainability training for business owners and tour guides
Lecture Notes
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